May 22, 2008

RM5.20 minimum price for a pack proposed

NST: A PACK of cigarettes will not dip below RM5.20 under a Health Ministry proposal to place “cancer sticks” beyond the reach of students and the poor.
Discussions between the ministry and the industry on the minimum price are in the final stages with an announcement expected soon.
The ministry will also require cigarette manufacturers to carry pictorial warnings on packs to drive home the message that smoking leads to health problems.
A third move will be to gazette National Service Training camps as non-smoking areas, raising to 20 the number of areas which are off-limits to smokers.
The New Straits Times has learnt that these are the major amendments to the Control of Tobacco Products Regulations (CPTR) 2004 to be signed by the health minister by the end of the month.
The regulations rely on the administrative powers of the minister and do not need to go through Parliament.
The minimum price is expected to be enforced as soon as the amendments are gazetted, while enforcement of the pictorial warnings is being targeted for December.
The amendments are to ensure Malaysia fulfills her obligations as a signatory to the World Health Organisation’s Framework Convention on Tobacco Control (FCTC).
As a party to the treaty signed in 2005, Malaysia had three years to fulfil cigarette labelling and packaging requirements.
Health Minister Datuk Liow Tiong Lai confirmed the proposed amendments, adding that the minimum price would prevent youngsters from taking up smoking.
“To put cigarettes out of the reach of young users, we need to do something drastic,” Liow said.
Ministry senior officials explained the pricing mechanism at a briefing for the tobacco industry earlier this week.
The proposed minimum price is based on 26 sen per cigarette, taking into account the manufacturer’s cost, sales and excise taxes, and gross profit.
However, the ministry wants the 14-stick pack to cost the same as a 20-stick pack, a move that non-premium brand manufacturers disagree with.
According to industry sources, certain non-premium brands are selling 14-stick packs for as low as RM1.50 to RM2.
If there is an increase in the sales and excise tax for cigarettes, the nett increase per stick will be added to the existing minimum price and multiplied by the number of sticks in a pack.
On the pictorial warnings, the ministry will come up with the pictures and distribute them to cigarette makers.
Each picture on a pack will depict a specific health consequence as a result of smoking such as mouth cancer, neck cancer, lung cancer, heart attack, stroke, premature babies and erectile dysfunction.
The amendments also stipulate the wordings that cannot be used on cigarette packaging. Words and phrases must no longer give the impression that some brands are relatively safer to smoke than others, or denote a glamorous lifestyle.
Words like “light”, “ultra mild”, “mild”, “cool”, “low tar”, “slim”, “extra”, “special”, “full flavour”, and “premium”, will not be allowed. Packs must also clearly state that the product cannot be sold to those below 18 years of age.
Packs must also carry the phrase “this product contains more than 4,000 chemicals including tar, nicotine and carbon monoxide” instead of the current explanation that each stick does not exceed 1.5mg of nicotine and 20mg of tar.
The regulations also state that cigarettes can no longer be sold with accompanying products like lighters, or be sold at a discount or with promotions.
Immediate reactions from some industry players at the dialogue revealed that the big companies were most concerned with labelling and packaging requirements.
Asking for a longer grace period to implement the pictorial warnings, they said these and other requirements to print additional information such as the manufacturing date would pose a challenge to their printing systems.
“We’ll have to keep changing the printing cylinders after every run and this will cost a lot. It could run into the millions,” a company representative said.
Questions were also raised as to whether the minimum pricing affected cigarettes sold in duty free zones, as these areas could arguably be considered as being “outside Malaysia”.
There were also concerns about whether importers of foreign-made cigarettes had to follow the packaging and labelling requirements.
The ministry will continue with two more rounds of dialogue before the end of the month to gather feedback before the minister approves the amendments.